Someone Should Thank Wal-Mart

This morning, Wal-Mart (WMT) reported a disappointing top line across all segments -- but we were braced for much worse considering the recently leaked internal company emails.

A domestic 1% comparison for the fourth quarter was not exactly inspiring, especially considering the all-important traffic metric turned negative for the first time in five quarters. What happened to all those price investments driving more people into the stores? After a leaked email that asked, "Where are all the customers?" (referring to January business), investors' minds were working overtime.

Wal-Mart cited all the reasons we have been worrying about: higher payroll taxes, rising gas prices and delayed tax refunds. Sam's Club was not spared either, as both divisions warned of a slow start to February. Enter rogue email No. 2, where a Wal-Mart executive suggested February was off to the worst start he had seen in seven years.

I would add another pressure to the mix: the dollar stores. As I previously have pointed out, Dollar General (DG) and Family Dollar Stores (FDO) have signaled that pricing was getting ugly as far back as October. Pricing battles have intensified since. That can't help the "Every Day Low Price" leader already struggling to keep traffic positive.

In terms of guidance, first-quarter comparisons are estimated to be flat. The plan seems aggressive considering the company is up against a 2.6% comparison. That implies acceleration in the two-year trend. I don't see any reason to believe trends will improve in the next three months.

For now, the market can thank those emails for setting the bar incredibly low.